Nearly three years have passed since the introduction of the R350 grant, however, a case has been made for its conversion to a Basic Income grant due to the country’s progressive income inequality.
Sassa initially introduced the R350 grant at the peak of the Covid-19 pandemic and added 11 million grant dependents to an existing 18 million social grant beneficiaries. The Social Relief of Distress grant has so far been temporarily renewed three consecutive times.
Since then, there have been growing calls for the R350 to be made permanent and form the basis for the introduction of a Universal Basic Income Grant. Founding Director at the Centre for Economic Development and Transformation, Duma Gqubule explains that this would be possible through an unfunded Basic Income Gant.
Gqubule adds that that would be achieved by converting the current Child Support Grant into a Basic Income Gant, and peg it to the country’s three poverty lines. These are the food poverty, lower-bound poverty and upper-bound poverty line.
According to his model, the B.I.G grant would start with monthly payments of R655 in the current year, R900 the following year and then R1546 in the third year.
“So if you are a mother with three children, you would get a B.I.G for yourself and for each of your three children. Currently, the child support grant is R505 a month and is below the food poverty line which is not right.’
Measured by value in rands per person per month, the Basic Income Grant would come to a total cost of R547.8 billion, according to Gqubule. He maintains that nearly half of this amount would provide an annual 2.5% to 3.8% stimulus to the country’s GDP through higher tax revenue and create over 2 million jobs.
The R350 grant currently has 8.4 million approved beneficiaries despite having over 14 million confirmed applicants. This grant has come under criticism from Gqubule for not keeping up with inflation as well as its strengthened eligibility requirements through a means test.